AI-Driven Job Crisis in India’s Middle Class

AI is creating a significant job crisis for India’s middle class, as highlighted by Saurabh Mukherjea, founder of Marcellus Investment Managers. He points out that the corporate environment in India is increasingly mirroring the “American” focus on profit and efficiency.

Shifts in Corporate Practices

During a discussion on the Bharatvaarta podcast, Mukherjea compared India’s changing corporate landscape to the early job losses experienced in the West due to automation during the 1990s.

“India is adopting an American approach,” he noted. “Corporate entities are prioritising commercial viability. The norms of hiring and firing are evolving, and the impact of AI is being felt deeply in the workforce.”

Trends in Indian Corporations

Mukherjea pointed out that major Indian firms such as HCL Technologies are striving to achieve “more with fewer employees.” This transformation extends beyond just the IT sector. “Fields like financial services, media, and management consultancy are also feeling the pinch — even roles like mine could be at risk of automation,” he remarked.

Impact on the Youth Labor Market

This shift is expected to disproportionately affect India’s youthful workforce compared to older economies such as France or Japan. “With a median age of 28, about 10 million graduates enter the job market annually, and it is junior, entry-level positions that will be most adversely impacted by AI,” he explained.

Vulnerability Due to Economic Structure

India’s dependency on repetitive white-collar tasks makes it even more susceptible to this transformation. “Creative roles are limited. Our economy has been built on labour arbitrage, which is precisely the type of work that AI excels in disrupting,” he shared.

The Ruthless Business Ethos

Mukherjea also mentioned the increasingly aggressive business culture. He noted that some CEOs in his investment portfolio are presenting plans for automation that could lead to a third of their employees being let go within five years. “They express, ‘You as a shareholder will benefit,’” he recalled, though he remained uncertain about the desirability of such outcomes.

A Glimpse into Automation

Visits to factories in Chennai and Telangana revealed a stark transformation — entire production lines now operate mainly through machines, with only minimal human involvement. “From milk to ice cream, automation is prevalent,” he stated.

Preparing for Disruption

According to Mukherjea, this is not merely a trend but a significant change on the horizon. “A major disruption is imminent,” he said. “We cannot rely on politicians for solutions — it falls upon us as workers to adapt.”